Anwesha intended to open a Recurring Deposit account of ₹ 1000 per month for 1 year in a Bank, paying a 5% per annum rate of simple interest. The bank reduced the rate to 4% per annum. How much must Anwesha deposit monthly for 1 year so that her interest remains the same?

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KollegeApply · Accepted Answer

₹ 1250 Explanation: Let K be the common time-factor for the monthly deposits same in both cases. Original interest = 1000 xx $\frac{5}{100}$ xx K. New interest = x xx $\frac{4}{100}$ xx K. Equating gives x = 1000 xx $\frac{5}{4}$ = 1250 So, she must deposit ₹ 1250 per month to keep the interest unchanged.

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